Spoiler Alert – Consumers Win

STEVE MCKAY / INSURANCE, PERSPECTIVES /

I have a friend in the industry who is fond of saying “the consumer’s position is unassailable.” If what you’re doing makes things harder for consumers, they will make you change it. And, while you’re getting around to that, whoever alleviates inconvenience will steal share. Airbnb, Uber and Netflix are all examples of this, each entering established markets with inventive and consumer-first models, each gobbling up market share. We saw a similar consumer-centric shift in auto insurance with the introduction of online insurance. Now, research shows that a vast majority of those that shop for insurance do so online – more than 70 percent according to ComScore.

As I’m out talking with folks in the industry or speaking at UBI-related conferences, I notice an important absence in many of those discussions; the need for the industry to identify and satisfy consumers’ needs. There are some discussions of consumer surveys and adoption rates, but most are really asking  a version of the same question, “What will it take to get consumers to buy the thing that is easiest for me to sell?” A couple of speeches I heard recently, for example, acknowledged that consumers prefer to interact with UBI programs through mobile apps but went on to assert that pricing inconveniences for insurers were more important.

Today’s UBI programs weren’t designed with consumers in mind, and it shows; they are hard to understand, they impose complex terms and conditions and they ask for long-term effort. Their communications begin with what a mentor of mine called, “America, get out your calculators!”  – endless displays of trips and maps and charts and distributions . . . without a succinct description of what “safe driving” means, what they get for becoming a safer driver. For the record, consumers generally assume safe driving means driving within the speed limit, which often is irrelevant to their driving score. The promised rewards are vague:  you could save up to X% after a while, then some other % much later based on how you drive.  Who?  How?

Consumers actually make it easy to understand what they want.  They’ll tell you, so we should listen to them. They want substantial benefits with rules that are easy to understand and clearly fair.  They want simple, easy to follow feedback.  They want transparency in how their data is used and what rights they have in it.  They want user interfaces that are as good as all their mobile apps.  They want to access their program information via mobile device at their convenience.  They want a shopping process that is easy, fast, and clear.

One of my colleagues at CCC likes to point out, “If it’s inevitable, you have to do it.”  Let’s care about consumers first and foremost as we build UBI programs.  And when consumers win, we will all win.

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